Why are Farmers Protesting?

For the last few months, farmers in Punjab and other parts of North India have been up in arms. What’s happening?

Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020.

Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act, 2020.

Essential Commodities (Amendment) Act, 2020.

These three laws (‘Farm Laws’) are at the heart of the farmers’ protests. Passed recently, these laws overhaul how farm produce is distributed in India. Farmers are now worried that this change will jeopardize their livelihoods.

Today’s story breaks down what’s happening.

The Mandi System

Traditionally, farmers sell their crops in mandis regulated by the Agricultural Produce Market Committee (‘APMC’). Farmers can’t freely transact in the open market. The agricultural produce must first come to the mandi.

This rule protects farmers from exploitation. The fact is that farmers often have low bargaining power. Larger retailers, on the other hand, are backed by money and power. The mandi system ensures that big private buyers don’t take unfair advantage of farmers.

The Farm Laws change this dynamic. They allow farmers to sell outside of APMC-regulated mandis. So, if a private buyer offers a good deal, the farmer can make a direct sale.

There’s also a second bone of contention.

The law provides for something called the minimum support price (‘MSP’). This is a price that is guaranteed by the government to farmers when purchasing certain crops. The MSP acts as a safety net against a sudden fall in prices.

With the Farm Laws, farmers are concerned that the MSP mechanism will be nullified.

Anti-Kisaan Move?

On paper, giving more freedom to farmers seems like a good idea. If they can make a better deal with a private retailer then why should they sell through the mandi?

This is where things get interesting. Turns out, the MSP is only available in APMC-regulated mandis. Farmers get no MSP in deals with private buyers.

While selling in the free market appears beneficial, farmers look at it as a way for the government to distance itself from the MSP. After all, the government has no responsibility to provide the MSP on private deals. This puts farmers in a tough spot. On one side, they may face exploitation from private buyers. On the other, they’ll also lose the MSP.

Farmers believe that under the garb of liberalization, the government is leaving them hanging in limbo. Hence the protests.

Dilli Chalo

Thousands of farmers are now marching to Delhi. They have stopped trains in Punjab. There are also threats being made of blocking roads. Their demands are clear – the Farm Laws must go.

As a peace offering, the state government of Punjab passed its own bills to negate the Farm Laws. But this isn’t enough. Farmers are still concerned that the Centre’s laws will supersede the state ones. And, in any case, the bills may not even receive the President’s approval.

Will the Centre relent? We don’t know. We do, however, hope that this heated situation doesn’t turn violent.

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